Dawn of a new gold operation

The mine camp at the Havieron joint venture in Western Australia.

Greatland Gold has appointed Shaun Day as its chief executive officer at a time when the company is looking to push the Havieron joint venture towards production. Nickolas Zakharia writes.

The Havieron joint venture (JV) between Greatland Gold and Newcrest Mining is a gold-copper resource that potentially represents the next generation of Western Australian mines.

In 2019, Havieron owner Greatland signed a US$65 million ($82 million) farm-in agreement with Newcrest to develop and explore its prospects, setting the stage to create another flagship operation in the country.

Australian gold mining has enjoyed buoyant activity in recent years as M&A (mergers and acquisition) deals increased and prices soared to record levels.

This culminated with last year’s $16 billion merger between Northern Star Resources and Saracen Mineral Holdings, which consolidated the Kalgoorlie Super Pit in Western Australia under single Australian ownership for the first time.

An integral part of Northern Star’s expansion was former chief financial officer Shaun Day, who oversaw the company’s market cap rise from $700 million to $8 billion. 

Day says his time at Northern Star serves as a tremendous platform for his role as chief executive officer at Greatland.

“I was really grateful for the opportunity and being part of the team that created this substantial miner here in Australia,” Day tells Australian Mining.

“It gives me a lot of large-scale mining operation experience, which is a continuation of the role at Sakari (Resources) before that. 

“Developing multi-billion companies from small miners into large mining houses is my background.”

Listed on the London Stock Exchange, Greatland’s market cap was sitting at around £890 million ($1.6 billion) in mid March.

The company is exploring gold tenements across Western Australia and Tasmania, with Havieron being the centrepiece for its growth ambitions.

Day’s vision as Greatland CEO will largely focus on advancing Havieron into production.

He also paid tribute to former CEO Gervaise Heddle, who he says put the company’s portfolio in a strong position.

“The cornerstone of that vision is very much delivering Havieron,” Day says. “We are well placed to do that but to have a world-class asset in the portfolio is naturally a fantastic opportunity.

“Augmenting that with additional growth opportunities. We want to be financially disciplined, but again the vision is to create a multi-mine, multi-billion-dollar organisation.”

Spearheading Havieron

Newcrest CEO Sandeep Biswas, speaking in a 2021 half-year earnings call, has reinforced the leading Australian gold miner’s plans for Havieron in the coming years.

“Our goal remains to realise commercial production from Havieron within the next three years,” Biswas says. 

“Our pre-feasibility study for the project is well underway and we expect to release these findings later this calendar year.”

Newcrest and Greatland are also working together to find “the next Havieron” in the Paterson Province

For Day, Newcrest’s support has been valuable to Greatland’s growth prospects.

“Newcrest has been a natural fit for Havieron. Some 45 kilometres to the west is their Telfer gold mine,” he says. “We’re able to leverage that existing infrastructure, including the processing facility.”

The Telfer gold-copper mine features the main dome and west dome open pits and underground mines. 

Its processing facility produces gold and copper using a dual train, comminution circuit plus floatation and cyanide circuits.

Havieron and Telfer are set to be closely linked, with Day saying the latter’s facilities will be used under the Havieron JV. 

“From a Newcrest point of view, (Havieron) is a brownfield development. We can use that existing Telfer base for logistics flights. It is a reasonably remote location that actually has a fantastic infrastructure footprint,” Day says.

“Having Newcrest involved is tremendous – they have a 65,000-metre drill campaign for the next six months for Havieron. The scale that they’re bringing to this is powerful and they’re a great partner.” 

Box cut works at the Havieron project.

Golden opportunity

The JV’s activities in the Paterson Province will be a key contributor of an Australian focus on gold exploration, which looks here to stay following record prices in 2020. 

EY M&A partner Paul Murphy says market volatility that drives up gold prices is likely to impact the precious metal.

“The gold price is driven by uncertainty and volatility in the financial systems, which helped drive the gold price to record levels in 2020. Think COVID, US elections and recessions,” Murphy tells Australian Mining. 

“The strong fundamentals for the gold sector in 2020, record prices driven by global economic uncertainty, strong balance sheets and major M&A deals are still present in 2021 and likely to drive increased focus on exploration and development companies as the larger players engage in reserves replacement either by their own exploration or by tapping juniors and explorers.”

Murphy says uncertainty in international vaccine rollouts and United States politics stability may cater to high gold prices in 2021 as last year’s key drivers subside.

“However, the advent of inflation and Chinese trade tensions are some factors that could destabilise the reversion to growth and spark a stampede back into gold and drive price growth,” Murphy says.

Day believes Havieron’s assets of gold and copper will continue to be a safe metal for many investors. 

“I think gold continues to be a sound investment in a global market which continues to see quantitative easing, which continues low interest,” he says. “Both of these are seen to be supportive of the gold price.”

For Day, copper is also an increasingly attractive commodity that Havieron is set to produce.

If Havieron enters production in the next three years, it will do so at a time when copper demand is expected to surge from new technologies such as electronic vehicles (EVs).

“One of the important aspects (of Havieron) is copper-gold. Copper is at a nine-year high and it obviously plays strong into that EV story,” Day says.

“For me, part of the charm of Havieron is not just its gold, but its combination of copper and gold exposure. It’s a lovely combination of commodity exposure to the company and its shareholders.”

Future signs

With further drilling being conducted at Havieron and a pre-feasibility study on the way, Greatland and Newcrest will be conducting box cut works at the mine. 

Greatland Gold CEO Shaun Day.

“We have commenced work on the box cut, which is the precursor to the commencement of the decline drive,” Day says. “We’re excited that’s underway. Part of the journey to get down to the orebody, the narrative, is that it’s going to take around three years to reach first ore from commencing that decline.”

With a number of exploration projects in the Paterson Province, Greatland is also well placed to develop its portfolio in the region outside of Havieron.

“Havieron is world class and creates this flagship asset for us – that’s sitting in the Paterson range,” he says. “We have other exploration opportunities within that Paterson Range – it’s elephant country. There’s Telfer, Havieron and now Rio Tinto’s Winu discovery within the Paterson as well.”

As a promising side project, Greatland is commencing its Juri JV with Newcrest to advance its exploration in the region in an attempt to tap into the highly prospective area.

“The best place to look for minerals is where minerals have been found. We strategically kept some ground in Paterson 100 per cent owned by Greatland and recently added to that footprint, which creates more high-quality targets for us,” Day says.  

This story also appeared in the April issue of Australian Mining.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.